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First time home buyer

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First time home buyer

Postby woodson_28 » Wed Apr 14, 2010 6:50 pm

When I post a question in here (TV problem, car trouble, etc...), I tend to get very informative answers. That being the case, I have another question that I bring to you guys.

My wife and I are considering purchasing a home. We would be first time home buyers, and we don't have much saved (as we're both still young). I really wanted to wait until we had a larger savings, but w/ the $8,000 tax credit extended thru April 30 (you only have to be under contract), my wife and I decided to look around. If we find something, great; if not we'll probably just wait 3 or so years.
One lender approved us for a FHA loan (of course), w/ a 5.0% fixed rate, small down payment (we plan to check out other lenders if we get serious about a house). Anyway, we've been using a Realtor, but came across a house on our own that we've looked at twice and really like. We haven't mentioned the house to our Realtor. The other Realtor (that is selling the house - a daughter of a co-worker) mentioned she would give us a better deal if we didn't bring in our own Realtor (assuming because then only one person gets paid?) - the house is owned by the Realtor, she flips houses.

Are there any pitfalls I should be made aware of if we were to go in w/out our own Realtor? Is it worth it to get my Realtor in on the action, even if it cost us another 2-3k?
Also, any general concerns when it comes to a person selling a flipped house? I know some people do shotty work, and flip it for a giant profit. From what I've gathered, it was a foreclosed house, and the Realtor has dropped a bit of money to improve it. It's an older house, but has a new 30-year roof, new heating/cooling, new heater, new appliances, new carpet, etc... I asked about the plumbing and electricity and they mentioned the plumbing was inspected and around 50% was replaced, and the electrical work has been redone as well.

IDK. I'm a pretty cautious guy, and I have my concerns about buying a flipped house, or even an old house, which is why I'm asking for the wisdom of people that have already purchased a home.

What other questions should I ask? Is there a way to find out about crime in the area? Any first time home owners advice that isn't common knowledge?

Thanks for the time guys.
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Re: First time home buyer

Postby Dan Lambskin » Wed Apr 14, 2010 9:05 pm

congrats...good time to buy. i'd say if you dont know your realtor personally just cut him out. just get a private home inspection done...i forget what our cost exactly but i'd say $100-$200 bucks or so. tell her you'll go with her if she tosses in a home warranty (again a few hundred bucks that she can foot the bill for if she wants the business)

you could try checking with the local police or neighbors about crime. i'd also suggest driving by at a few different times of the day

hope that helps
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Re: First time home buyer

Postby thedude » Wed Apr 14, 2010 9:52 pm

Defiantly get your own home inspector.

As to crime rates, there are numerous websites now that report crimes rates based on neighborhood.
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Re: First time home buyer

Postby Metroid » Wed Apr 14, 2010 10:19 pm

Yup, what the previous posters said, get your own home inspector. And yeah try and get at least a year home warranty thrown in, sellers often do that. Also if the lady truly is the owner of the house, try and get her to cover closing costs. ;-)

And Dan's right on about checking by at different times of the day. Go on weekend evenings and see what's going on.

If you can do it, buy, it's a great time.
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Re: First time home buyer

Postby Madison » Thu Apr 15, 2010 12:09 am

Agreed with everyone else. Buy now, as interest rates are only going to go up for the next couple of years.

Personally, I wouldn't care which realtor handles the deal, just get the deal you want or don't buy it. If it takes getting the second realtor involved in order to get the deal you want, go for it. Just ultimately get the deal you want, that's the important part.

You said it's an older house, so I'd certainly want a warranty of some kind. If in fact all the stuff they've told you is "new" really is new, then most of that should come with some sort of warranty from whoever did the work and/or made the product. But I'd make sure you've got everything covered, otherwise, I'd suggest having a large bank account to cover unexpected problems. Oh, and the 50% of the plumbing sounds weird. First thing I thought? Well if they fixed 50%, then isn't 50% of it still old and cruddy? Just something to keep in mind.

Sounds like you're moving from an apartment into the house, so if that's the case, this will sound totally nuts, but my wife and I did this and was amazed at the move in costs, but go room to room and write a list of everything you want/need to furnish the place or have it the way you want it. And I do mean list every...single...thing, every single dollar (they add up faster than you'd imagine). Then you'll have a budget on what it will truely cost you to move in. This will relieve the "where does it end?" stress once you start buying stuff, it will give you areas where you can cut or buy cheaper if there's something missing from your list that you remember, most importantly it will tell you what it WILL cost to get situated, etc. Oh, and I don't mean luxury items for the list unless it is a "must" have from the get-go. I'd like to have a deck over our back patio, but that didn't qualify as a "must" and we'll get it done when we get it done. Anyway, that was something pretty helpful that we did. Might be helpful to you as well.

Good luck! ;-D
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Re: First time home buyer

Postby dream_017 » Thu Apr 15, 2010 11:57 am

Madison wrote:Oh, and the 50% of the plumbing sounds weird. First thing I thought? Well if they fixed 50%, then isn't 50% of it still old and cruddy? Just something to keep in mind.


This was my though as well. Seems odd that only 1/2 of it would be bad enough to replace.

I agree with averyone else about the inspector and warranty ;-D
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Re: First time home buyer

Postby AussieDodger » Thu Apr 15, 2010 12:03 pm

I think the building survey should really dictate whether you buy this or not.
It could end up being a black hole of money if you have to keep repairing major areas.

We bought a 1970s ex-govt. house as our first house 7 years ago, and have been slowly renovating it. (And I mean slowly :-D )
I would highly recommend this sort of route for your first house, especially if you are handy with a hammer (I am not :-b ). If you look to buy this sort of thing you could get yourself a real bargain. ;-D
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Re: First time home buyer

Postby StlSluggers » Thu Apr 15, 2010 1:35 pm

Re: Home Inspectors. Don't go with them.

Some of them are very good at what they do, but most of them are worthless and perform only cursory evaluations like turning on all the faucets to make sure they run and don't leak and checking outlet polarity. Good thing they're certified to do that!

It's more pricey, but you're much better served having experts come in to evaluate the high-risk areas. Get a plumber and an electrician at the bare minimum. Call in other experts based on what you see. Maybe you notice some rotted conditions in the ceiling and want to call a roofing expert or carpenter. Maybe the HVAC is old. Call an HVAC expert to give you an idea of the system's condition. In homes that have been empty, you might even need to get a pest control expert in to evaluate whether or not the place is infested. You never really know what will come up, so keep your eyes open and address all of your concerns before you sign that contract.

This will cost you up to 5-6x more (~$1,000) than what you'd spend on a home inspector (and you may irritate the seller into not wanting to sell to you), but you will unearth way more than the "inspector" ever will, and you'll be able to work issues out in the contract negotiations instead of out of your pocket book later.

And in the case of a flipped home, you could be looking at some shoddy, quick fixes designed to disguise real problems.

Re: Realtors. If you have a home picked out, just get a lawyer. They'll be cheaper and won't want a commission from the seller, so you'll be able to ask down even more ("hey, i'm not using a realtor. you're saving 3%. give me 2%.").
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Re: First time home buyer

Postby woodson_28 » Thu Apr 15, 2010 5:22 pm

Thanks for the info guys. A few other questions.

The Realtor selling the house has only owned it for 2 or so months. In this case, would it be accepted to trust their paper work on inspections that occurred two months ago. Meaning, if they had an exterminator come out and inspect for termites and they found none, if we see signed paper work on that, should we trust it, or spend the extra $ to bring out our own guy? I don't like to waste money, but I also don't trust most people.

Also, I have heard rumors that the first month of rent is typically free ... or not free, but you don't pay the first month (know what I mean?). Like if you move into the house in the beginning of June, your first payment will be middle July. True?
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Re: First time home buyer

Postby Madison » Thu Apr 15, 2010 5:31 pm

woodson_28 wrote:Also, I have heard rumors that the first month of rent is typically free ... or not free, but you don't pay the first month (know what I mean?). Like if you move into the house in the beginning of June, your first payment will be middle July. True?


This is how it was for me. First payment was due about 45 days after the day the papers were signed. ;-D
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